INNOVATE. INTEGRATE. TRANSFORM.

Strategic SAP Solutions for Measurable Business Value

9 Games ERP Consultants Play

January 14th, 2013 by

ERP Consultant Games

Most in the ERP industry agree that software consultants can play a major role in helping their clients successfully implement a new ERP package. While some consulting firms have more expertise than others do, at least most firms try to operate with their client’s best interest in mind.

However, there are many firms within the ERP industry that are outright thieves. They will not hesitate to take advantage of their clients in order to pad their own wallets. In fact, some firms are so good at this it has become part of their standard operating procedures.

Clients that are educated and aware of the games consulting firms play can save themselves a few headaches and a lot of money. Below are some of their tricks to watch out for.

1)      The “Bait and Switch” Routine

During the sales process, this is when certain consultants are brought in to display the expertise within the firm. They may know best practices and the software, but it might be the last time you ever see them.

2)      Resumes: Lies and Half-Truths  

Outright falsification of consultant resumes is more common than you think. In addition, many resumes presented by the firm are not really resumes, but vague “profiles” that lack detail and read like sales literature.

3)      “Lowballing” the Quote

This is the oldest trick in the book, yet surprisingly many clients continue to fall into this trap. For example, all consultants know that for time and material quotes the actual implementation costs are usually much higher.  Also, most fixed price quotes are only fixed until further notice.  When the client wants to make only minor changes in the project scope, they are hit with expensive change orders. The change order costs are usually 100% greater than the actual time for the consultants to perform the work.

4)      The “Best” Implementation Tools & Methods

Most firms claim to have the very best implementation methods and tools available. However, do not be surprised when their consultants run off and do something entirely different during the project. Maybe the tools are not so great; otherwise, their consultants would use them!

5)      The Less You Know – The More Money They Make

For some firms, a potential client that has ill-conceived project objectives, an undefined scope, or lacks basic knowledge of ERP; is considered a gold mine. The idea is to gloss over these “minor” details until after the client signs the contract.

6)      Marquee Accounts for Reference Checks

When a potential client asks for a list of the firm’s other clients for a reference check, many firms provide only their “marquee accounts”. These accounts are compensated by the firm in some form for being a reference. Therefore, do not expect these clients to mention anything bad about the firm.

7)      Not Enough Time and Talent

Most consulting firms would love to “camp out” on your ERP project. One way to do this is convince the client that the organization lacks the right employees for the project. Also, some firms too easily support the premise that the client’s best employees have other tasks to perform that are more important than an ERP project. That is, “No need to get your hands dirty. Our consultants will do the project for you.”  

8)      “Add-on” Services 

Once consultants get their foot in the door, many try to sell their clients additional services. These include more consultants for readiness assessments, change management programs, best practices, and other services you may not truly need. Also, do not be surprised when your consultants push for software functionality that was originally out-of-scope. 

9)      The Promise of Software Knowledge Transfer

Most firms state that one of their goals is to “work themselves off the project” by transferring software knowledge to the client. However, nine times out of ten, if it is going to happen, the client must force the issue. Considering their hourly rates, what incentives do consultants have to transfer software knowledge?

This guest post is by Steven Phillips, author of the Street Smart ERP blog and the new book Control Your ERP Destiny.




Popular Searches:


  • WWWR USA FAKING MOVE SAXI
  • WWWR INDIAN SAKING AND FAKING MOVE
  • WWWR INDIAN FAKING MOVE
  • consulting company fake resume
  • saking faking
  • saking faking hindi saxi story
  • Saking the faking
  • sap erp implementation readiness assessment ppt
  • sap resources fake resumes
  • saxi move faking saking
  • WWWR COM INDIAN SAKING FAKIMG MOVE
  • organizational change management guest post

Related Posts:

SAP Third Party – Indirect Usage Licensing Part 2

December 3rd, 2012 by
SAP Indirect Usage Licensing

SAP Software License

For those who may not be aware, SAP is not the first company to require user licenses for third party or “indirect usage.”  It is becoming more commonplace and some companies are quite aggressive with it.  This follow up to last week’s post on SAP Third Party – Indirect Usage Licensing Part 1 will address real opportunities here.

Over the years SAP has set itself apart by aggressively pursuing sales while generally maintaining good customer relations.  It is a balancing act that has served SAP well.  Over the years SAP has avoided the market perception of a ruthless, do anything to get the sale, software vendor. 

This whole third party, indirect software usage can undermine that. 

But there IS an answer!

SAP Are You Listening?  There IS a Third Party / Indirect Usage WIN-WIN Here!

Like any other company, revenue growth is a primary focus.  For software companies, directly related to revenue growth there is also expanding the software footprint within the customer base. 

SAP as a company wants to grow revenue and expand their software footprint. What if there IS a way to achieve this AND satisfy your customers too. 

Would you agree this would be a WIN-WIN?

Customer Perception of the SAP Third Party Indirect Usage Licensing

Purchasing licenses for “indirect usage” feels to a customer like they are paying for something and not receiving any benefit.  There is no “value” in this approach from a customer perspective.  Yes SAP, you have your Intellectual Property (“IP”) to protect, and yes, you developed that IP. 

I am not talking about a legal issue with your IP, instead I am referring to a sales, marketing, and customer relations issue.

Add a customer’s lack of awareness to the perception of “no value” and you have a recipe for difficult customer relationships.  SAP third party or indirect software usage presents an unbudgeted “pure expense” from a customer viewpoint.  Most customers really are not aware of the indirect usage requirement so they don’t budget for it

SAP, Your Third Party or Indirect Usage Answer

Provide your customers a value added alternative to indirect usage or third party compliance issues.  Give them an option to substitute the third party or indirect usage cost they would have incurred in the form of other SAP applications or solutions.  In this way your customers are receiving something of value, you are expanding your software footprint, and you are still gaining the revenue you were looking for without the nasty reputation.  If necessary, give them a deferred payment window so they can plan for and budget the change.

Provide your customers a value added alternative to indirect usage or third party compliance issues.

You can gain a HUGE advantage by targeting certain application deployments–, for example if you want to expand your Cloud sales, HANA, or mobile, you could pick the various products you will allow as a substitute for the indirect usage fees.  This in turn boosts your sales of these newer products and provides your customers with something that is meaningful.  This has huge strategic benefits, for example, each HANA sale potentially displaces Oracle.  Each CRM sale substitute (for the indirect usage) potentially displaces Salesforce. 

Expand Application Footprint and Increase Revenue

ALWAYS be ready to trade the 3rd party integration for a deeper footprint which keeps a competitor out of the client.  Clients benefit from new software capabilities and SAP benefits from a revenue stream WITHOUT the negative relationship consequences of “forcing” the 3rd party maintenance issue.  This also becomes a differentiator with Oracle and other vendors who will push the 3rd party issue.  SAP STILL gains the additional revenue.

ALWAYS be ready to trade the 3rd party integration for a deeper footprint which keeps a competitor out of the client

You could structure contracts to defer 3rd party usage fees by adding some tradeoff in contracts like “as long as annual license revenue is at least ‘x’ no 3rd party licenses.” By doing this you are taking a “gentler” approach in preparing customers for a possible future license event.  This takes the surprise, frustration, and shock out of the equation while keeping your revenue stream more predictable and giving them a chance to budget for the spend.

Conclusion on SAP Indirect Usage or Third Party Usage Sales and Marketing Options

Seriously SAP, you have a LOT of options here.  You can be less adversarial and note that you will defer indirect usage or third party fees as long as a customer’s annual, net new license spend is “X” amount a year.  If they need new licenses for additional users the customer perceives this as a benefit and they can gain additional time to budget for an eventual indirect usage fee.  You are still satisfying your CORE requirement to grow revenue while increasing your solution footprint within your customer base AND in a way that is less offensive than the customer perception of a cost for no benefit.  Many customers look at this as a penalty for choosing SAP solutions.  While the IP is yours SAP, it is offensive to a customer because the data and business are theirs.

This creates a more open environment and many more customers may be willing to “come clean” about indirect usage.  By providing some kind of perceived benefit they are more likely to address the compliance (rather than hiding it) AND the customer AND SAP gain something of value.  Talk about a “Win-Win”!




Popular Searches:


  • SAP licensing for 3rd party

Related Posts:

SAP Third Party – Indirect Usage Licensing Part 1

November 26th, 2012 by
SAP Software License Guide

SAP Software Licensing

Many SAP customer license contracts contain either a direct or an indirect reference to SAP’s third party usage licensing requirements.  That requirement is referred to as “indirect usage” and carries a hefty potential financial penalty.  The basic idea is that if you use any non-SAP system to access SAP data the user of that external system must acquire an SAP Named User License.

While I understand SAP’s argument that if you use portions of the SAP software (BAPIs, RFCs, Function Modules, etc.) that you are using their Intellectual Property (“IP”) then they should be paid for that–, it still frustrates many customers.

Where is the Reference to Indirect Usage?

Unless you have explicitly negotiated OUT (or around) the indirect usage it is most commonly contained in SAP contracts in 1 of 2 ways.  It is either explicitly spelled out in the contract language, OR it is buried in some boilerplate language related to the order in which any contract confusion (or dispute) is to be resolved.  Frequently that language lists a hierarchy which references the SAP Price List. 

The SAP price list (in its January 2012 form) is currently over 120 pages AND contains detailed language related to indirect usage.  When it comes time to Untangle SAP Software Licensing your organization should become very familiar with its various provisions.  Like it or not most contracts do subject you to the price list’s terms.  You might as well consider that 120+ pages part of your contract.

SAP Indirect Usage or Third Party Usage Enforcement

Recently SAP has gotten more aggressive about customers paying for third party system connections to SAP applications.  The current push is that you must have a Named User License for any user who gains access to SAP data – even from external systems.  While there are some narrow exceptions the push is to just license any user who acquires the data.

From a customer standpoint Indirect Usage or Third Party Usage creates no value.  It only creates friction, frustration, and mistrust between SAP and their customer base.

In a recent license and contract negotiation with SAP and a fair sized customer, with a significant annual license and maintenance spend rate, this issue came up.  It became a major hurdle to reaching a reasonable agreement that everyone could be happy with.  While SAP was willing to concede special Named User licenses for the Indirect Usage (at a very low cost) it was still a problem.  The customer perspective is that if they decide to use another vendor’s product, and are not engaged in some unethical means of SAP software use to avoid paying SAP licenses there shouldn’t be any fee.  This is becoming a serious issue because from a customer standpoint Indirect Usage or Third Party Usage creates absolutely no value.  It only serves to create friction between SAP and their customer base.

The current focus seems to be on going after third party applications such as Salesforce.com which serve to displace SAP’s own CRM solution.   The SAP User Experience has become a big part of the reason many customers choose alternative solutions and SAP has got to do a better job of addressing that.  Because of SAP’s CRM application shortfalls I have also suggested SAP consider SugarCRM as The PERFECT SAP Acquisition Target, but the real issue is that sales people and customer facing processes want “pretty.”  The SAP CRM option comes up short in the “pretty” and usability category.

There are options for SAP customers, and there are better options for SAP as a software vendor.  Yes SAP, there actually is a way to grow your revenue, increase your software footprint AND have happy customers too!  There really is a way to “have it all” if you will consider it!

The discussion next week is around an SAP Sales and Marketing option which can significantly change this customer pain point.  It will help set SAP further apart from competitors while still growing the application footprint AND increasing revenue.  SAP, if you’re reading this, you don’t want to miss next week’s post!




Popular Searches:


  • external access sap licensing
  • sap indirect usage licensing
  • Company transformation SAP license
  • indirect usage of licence sap
  • is it legal to use RFC connections in Sap Erp to avoid licenses
  • SAP Indirect license
  • sap indirect usage
  • sap rfc license

Related Posts: